We all know the saga of the once upon a time Retail Giant Future Retail, which now unfortunately is debt ridden and is going through insolvency resolution process.
In order to acquire its assets, as many as 49 players including Reliance Retail, Jindal Power Ltd and Adani group have submitted Expression of Interest (EoI).
49 Players Respond to the EoI of Acquiring FRL’s Assets
After the division of FRL’s assets into clusters, the lenders of Future Retail decided to invite fresh bids to which Reliance Retail Ventures Ltd has submitted the EoI. Also, April Moon Retail Private Ltd, a joint venture between Adani Airport holdings and Flemingo group have again submitted their EOI for the same.
As per an update from the FRL’s Resolution Professional, the 49 players would be permitted to submit “resolution plan(s) for any/all such Clusters under Option II”.
In addition to big names like Reliance, Adani, there are others as well who have submitted Expression of Interest (EoI) and they include the likes of Century Copper Corp, Greentech worldwide, Harsha Vardhan Reddy, J C Flowers Asset Reconstruction Pvt Ltd, Pinnacle Air Pvt Ltd, Universal Associates and WHSmith Travel Ltd among others.
Since the FRL failed to attract a resolution plan in over four months, the On March 23, 2023 creditors of Future Retail invited new expressions of interest where prospective buyers can bid for the debt-ridden firm “as a going concern or individual cluster or a combination of clusters of its assets”.
Prior to this, it received plenty EoI, out of which 11 were finalized which included the likes of Reliance and April Moon Retail. However, these could not get a resolution plan despite two extensions in deadline for submissions.
Two options were later provided in the EoI by the Committee of Creditors for which the last date for submission was April 7, 2023.
In the first option, the Prospective Resolution Applicant (PRA) could bid for the acquisition of Future Retail as a whole, including its shareholding interest in its subsidiaries.
While under the second option, Future Retail’s business has been distributed in five clusters diving business, in which PRAs can bid for “any individual cluster or any combination of clusters.”
Giving its reasons, the new EOI had said “having regard to the complexity and scale of operations of FRL, the resolution professional has, in consultation with and prior approval of the CoC of FRL, categorized the business of the corporate debtor in five clusters.”
A Brief History of FRL Acquisition Attempt
After defaulting its loans, CIRP was initiated against the FRL by its lender, Bank of India.
EoI were invited from the prospective bidders on October 04, 2022, as per the provisions of the Insolvency & Bankruptcy Code.
Later, it was reissued and the submission date was extended for the Resolution Plan and a final list of 15 PRAs was published on November 15, 2022.
Earlier on March 15, FRL had informed that almost one and a half months after resigning from the suspended board of FRL, Kishore Biyani has withdrawn his resignation.
This came after the RP had raised objections to the contents of Biyani’s resignation letter and had requested him to recall it.
FRL operated multiple retail formats in both the hypermarket supermarket and home segments under brands, such as Big Bazaar, Easyday, and Foodhall. At its peak, FRL was operating over 1,500 outlets in nearly 430 cities.
It was part of the 19 Future group companies operating in the retail, wholesale, logistic and warehousing segments, which were supposed to be transferred to Reliance Retail as part of a Rs 24,713-crore deal announced in August 2020.
This was later rejected by lenders amid the legal challenge by Amazon.
Last year in August, stock market regulator SEBI ordered a forensic audit of the accounts of FRL for the financial years 2019-20, 2020-21 and 2021-22.
Post the news, the shares of FRL have nearly climbed 5% on BSE. On the NSE, it jumped 4.16 per cent to finish at Rs 2.5 each share, in upper circuit limit.
